What is Rights Issue? A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price. Why Rights Issue? Company need money for followings Expansion Debt Repayments (Reliving high Interest rate Debt) Merger & Acquisitions Due to poor credit rating, Banks may not lend further. Need capital for Ongoing operations What is Ex-Date? Most of the Corporate Actions ( Bonus, Split, Dividend, Rights, Buyback) eligibility is decided by Registrar who is keeping the all the Investors name of that company. Lets take Ex-Date for Rights: In India, Trade settlement is happening in T+2 days. When You buy today, Your name will appear in Registrar book on T+2 days. But people buy and sell everyday, ...
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